The past several decades, forensic accounting has grown exponentially from an as-needed service to an in-demand industry.
Forensic accounting combines accounting, auditing and investigation and often is used in legal cases. This specialized accounting and in-depth analysis can touch any business or person and is more widespread today than ever before.
There are plenty of job opportunities available in this profession, as well, and college business students are encouraged to consider this as a field of study.
Bethany Novis, partner and forensic accountant at Lancaster-based RKL LLP, which has an office in Spring Township, said she has been doing forensic accounting for about 20 years.
So it is not new but has evolved since it began decades ago. It takes on multiple forms, covering areas such as fraud and theft, litigation matters, cyber security and data analytics.
“Most common fraud [forensic] cases are simple, not these complex things you see on TV,” Novis said. “Usually, it is started by an individual in authority that has access to company property. …
“They may start by putting some personal expenses on company credit cards. It can then expand to putting vacations or plane tickets on the credit card, and writing checks for their mortgage.”
‘SOMETHING LOOKS WEIRD’
At times, forensic accounting assignments require the reconstruction of records that are missing or destroyed either intentionally or by fire, Novis said.
“Most fraud cases are discovered when a person is looking at records kept by someone that is on vacation or on medical leave,” she said.
“So it is found just by someone doing their job, and the company will call us and say, ‘Something looks weird.’ ”
Novis said forensic accounting is growing as a field of study and jobs are in demand and always available.
Area accountants say that college graduates are recruited and trained to join the forensic accounting profession, which can affect all types of businesses no matter their size or scope. More colleges are offering courses and programs on fraud and forensic accounting.
In Upper Macungie Township, Todd Newcomer, partner and accountant at GBB & Co. LLP, said forensic accounting and fraud examinations are becoming more common.
“More jobs are available for individuals with these skill sets,” he said. “Law firms, banks, large companies, municipalities and accounting firms all are looking for talented forensic accountants.”
Accounting professionals say calls come in weekly, sometimes daily, for forensic accounting matters. Those in the industry define it as investigative accounting that looks into wrongdoings, misappropriation of funds and misconduct.
Forensic accountants delve into bank accounts and statements, credit card accounts, financial ledgers, computers and other electronic devices to essentially uncover where the money has gone.
“We call it following the money trail,” said Glenn Block, senior partner and Certified Public Accountant at Block & Aldinger in South Whitehall Township.
He said he participates in national conventions on the topic of forensic accounting, teaches courses on the subject and recruits college students to get onboard.
Block said a large part of the profession involves litigation cases, and lawyers often contact him to review company financial information, look closely at wire transfers and money transactions and even payroll records to piece together what happened.
“Once we find the wrongdoings, we implement internal accounting controls,” he said. “It is important to involve multiple people in a business accounting system so that there is less chance for collusion.”
Novis said it is a good idea to have several sets of eyes on company financials.
She said that in her experience a lot of forensic or fraud investigations occur at nonprofit organizations where accounting matters are often less scrutinized because of a shortage of staff members.
Richard Gurniak, partner and accountant at Gurniak & Gurniak in Lower Macungie Township, said he has been involved in forensic accounting for many years, and that it spans a wide range of industries from health care and construction to small closely held operations.
He said he handles fraud matters, which is a form of forensic accounting. He said fraud in forensic accounting requires a higher degree of fraud analysis.
There are times he has been asked to work on cases where shareholders request audits, divorcing spouses are questioning each other’s assets, and people are looking to investigate missing money in estate matters.
“I have people call with concerns that there has been misappropriation of funds,” Gurniak said. “Sometimes, we find that there is no problem. Sometimes, it comes down to just keeping good records.”
SEPARATION OF DUTIES
Newcomer said that in many cases it is all too easy for people in an organization to misappropriate money.
Common ways employees misappropriate funds include theft of cash, skimming, fraudulent disbursements and misuse or theft of company assets.
“Owners, board members and managers are often unaware of the need for separation of duties and oversight within an organization,” Newcomer said.
“Whenever possible, the recording of transactions, reconciling of accounts and physical custody should be spread among more than one employee.”
JOB GROWTH POTENTIAL
Manager and accountant Paul Mack of Campbell, Rappold, & Yurasits LLP in Salisbury Township said the job growth potential for forensic accounting is huge.
“With both business and personal lives continuing to rely on technology, this just creates another thriving opportunity for those willing to commit fraud,” said Mack, who noted the value of a Certified Fraud Examiner license.
“The need for those pursuing forensic accounting or obtaining a CFE license … is important in our effort to curb the threat of fraudulent activity,” he said.